Time

You are here

Obama Wins Debt-Limit, Budget Truce

President Barack Obama won passage by the Congress early on Friday of legislation that lifted the threat of a default on government debt through the end of his presidency and a budget blueprint easing strict spending caps through September 2017.

The Senate voted 64-35 to approve the measure, which was negotiated over the past few weeks by the White House and congressional leaders, including newly retired former House Speaker John Boehner, Reuters reported.

Obama is expected to sign the bill into law promptly.

Without action by Congress, the treasury department would have exhausted the last of its borrowing capacity on Nov. 3, according to Secretary Jack Lew. That, in turn, risked a default on US obligations within days that would roil global financial markets.

The two-year budget provision provides new top-line spending levels for Congress for the fiscal year that began Oct. 1 and the one starting Oct. 1, 2016.

It loosens budget caps, allowing an additional $80 billion in spending on military and domestic programs over the two years.

But lawmakers still need to allocate that money among thousands of budget line items. They face a Dec. 11 deadline, when existing spending authority by government agencies expires, and a spirited fight is expected.

Conservative Republicans are likely to try to attach some controversial policy add-ons, such as prohibiting funding for women’s healthcare provider Planned Parenthood to punish it for its abortion activities.

Some may also try to undo “Dodd-Frank” Wall Street reforms enacted after the 2008-09 financial crisis or prohibit new regulations on carbon emissions.